December being a year-end is generally a lull month in terms of Wholesales (dispatches from OEMs to Dealers). However, the end consumer retails is one of the highest among all months citing high discounts.
Dec’18 was again a tough month for the Indian Auto Industry and was stagnant when compared to same period last year. The situation is going even worse for the challenging brands (bottom 6 OEMS) where dip in volumes is hitting their bottom lines really hard and justifying the heavy investment is getting even more difficult. The condition for the dealerships are also at a critical stage as they are carrying an average of 45 days stock and their profitability is thinning as well due to additional discounts being offered from their margins to liquidate stock.
Factors that has affected the overall industry in the past few months are:
Increase in Fuel Prices – The Fuel Prices had sky rocketed this year and has affected consumer sentiments at large. However, in Dec’18 the fuel prices dropped to the all time low for the year.
Weakening of Rupee – OEMs are sourcing parts from various country and weakening of rupee affects their overall transactions.
Rising Interest Rates – The change in IRR has increased the overall car loan rates and has made it more difficult to buy a car in recent times!
Volatile Stock Market – Lot of money is lost in the fluctuation in the stock market. Not a good time to buy a car, eh?
Let’s see how the OEMs fared in Dec’18 –
Maruti Suzuki could grow a nominal 1% in Dec’18 v/s Dec’17. However; even with this performance Maruti registered its all time best December month sales figure!
Even with a recent big launch executed (Santro); Hyundai’s YoY growth was just 5%. Can you imagine Hyundai’s condition sans Santro?
Tata could again pip Mahindra from the third spot! The fight for the Third Rank is going to get hotter with 2 new launches from the Indian OEMs – Harrier from Tata & XUV300 from Mahindra are going to shape 2019 performance for their respective OEMs
Honda could grow a modest 4% in Dec’18 v/s same period last year. The New Amaze has helped the Japanese MNC sustain its volumes this year.
Renault, VW, Nissan, Skoda & FCA have all registered double-digit degrowth! The bottom 6 are finding it extremely tough to maintain their Market Share and are losing their ground mercilessly.
How the Market Shares fluctuated in Dec’18 v/s Dec’17 –
Maruti was again successful in garnering >50% Market Share. The Market Share has grown by 0.5% YoY
Hyundai has gained the highest market share with an increment of 0.8% v/s last year
FCA has lost the highest Market Share in Dec’18 due to the dwindling volumes of its flagship Compass.